Debenhams Plc, the U.K.’s second-largest clothing retailer, reported first-half profit fell 5.4 percent as snow disrupted purchases of winter goods, forcing the chain to offer more discounts.
Profit before tax in the six months ended March 2 declined to 120.3 million pounds ($184 million), the London-based retailer said in a statement today. That compares to the 121.8 million-pound average estimate of eight analysts compiled by Bloomberg. The retailer will pay an unchanged interim dividend of one penny.
Debenhams blamed snow that “severely disrupted” sales at the end of January, forcing it to bolster discounts to clear excess stock. The retailer is refurbishing stores, extending its online offer and opening franchise outlets internationally to offset stagnant U.K. retail sales.
“We made progress during the first half although snow in late January meant we did not achieve the profit outcome we had expected,” Chief Executive Officer Michael Sharp said in the statement. “We expect to make further progress in the second half despite consumer sentiment remaining weak and challenging market conditions.”
The shares fell 1.4 percent to 80.5 pence in London trading yesterday. The stock has dropped 29 percent this year, underperforming the FTSE 350 General Retailer’s Index, which has climbed 7.3 percent.